June 25 - Wells Fargo has lifted its price target on Microsoft (MSFT, Financial) to $585 from $565, while maintaining an "Overweight" rating, citing long-term upside tied to the company's accelerating AI business.
Analysts led by Michael Turrin see Microsoft's AI ambitions as still in the early innings, but with significant potential. Their upside scenario projects over $100 billion in AI revenue by fiscal year 2029, fueled by strong momentum in Copilot and broader app-layer integration.
The firm highlighted that Microsoft's AI business reached $13 billion in annual recurring revenue in under three years, the fastest pace in the company's history, despite capacity limitations. That figure could approach $20 billion by the end of fiscal 2025 as infrastructure expands.
Turrin's team expects Copilot to hit critical mass in fiscal 2026. With only 10% penetration of Microsoft's enterprise customer base, the tool could bring in $12 billion in annual recurring revenue.
While ongoing talks with OpenAI continue to make headlines, analysts believe major changes to Microsoft's existing deal are unlikely unless the terms shift substantially.
Is MSFT Stock a Buy?
Based on the one year price targets offered by 49 analysts, the average target price for Microsoft Corp is $513.04 with a high estimate of $650.00 and a low estimate of $423.00. The average target implies a upside of +4.68% from the current price of $490.11.
Based on GuruFocus estimates, the estimated GF Value for Microsoft Corp in one year is $505.39, suggesting a upside of +3.12% from the current price of $490.11.
